Reading 7: The marketing mix - place (distribution channels), Prohibits…
Reading 7: The marketing mix - place (distribution channels)
1 Distribution channels
'Value delivery network'
Functions of channel members ((Kotler and Armstrong (2016, pp. 378-9))
Traditional distribution channels and a vertical marketing system (VMS)
Vertical marketing system (VMS)
Leading channel member
Subordinate channel members
This concept would only be possible under the following circumstances/organisations
Corporate VMS common examples
Contractual VMS common examples
Pret A Manger
Fast food outlets
KFC (Kentucky Fried Chicken
Continuous move routing
Choosing the right distribution channel
Influences for distribution objectives and choices
The level of service they wish to provide
The size of the company
The type of product
Through one or only an exclusive outlets
Intensive distribution -
Selective distribution -
Fewer, selected outlets
Manufacturers requires its distributors to sell only its product(s) and precludes its distributors from selling competitors' products.
Sales territory restrictions
Manufacturers ties a distributor to taking more or all of its products.
1/7 problems in embedded in the marketing mix
Multiple distribution channels
Prohibits from selling manufacturers products overseas.
All of these arrangements can restrict competition, restrain trade and create monopolies as they each one raises potential legal issues